Clandestine removal cannot rest on uncorroborated discrepancies alone; duty demand, limitation, and penalty all failed.

A charge of clandestine removal cannot be sustained on bare discrepancies in oxygen consumption figures alone; absent statements, investigation, dispatch records, transport details, sale proceeds, or other corroboration, the duty demand failed. The Department had also received the relevant statistics book regularly, so the later notice could not rest on any proved suppression or intent to evade duty; the extended limitation period was therefore unavailable. As the demand itself was unsustainable, the penalty also could not survive, and the impugned order was set aside.

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Issues: (i) Whether the duty demand based only on discrepancies in oxygen consumption figures could sustain a charge of clandestine removal. (ii) Whether the extended period of limitation and penalty were invocable on the facts of the case.

Issue (i): Whether the duty demand based only on discrepancies in oxygen consumption figures could sustain a charge of clandestine removal.

Analysis: The demand rested on differences between figures appearing in different parts of the annual statistics report and the RT-12 returns. No statements were recorded, no further investigation was undertaken, and no corroborative material such as dispatch particulars, transport details, sale proceeds, or evidence of additional consumption was brought on record. A serious allegation of clandestine removal cannot be sustained on a bare arithmetical discrepancy without prima facie proof of actual removal.

Conclusion: The charge of clandestine removal was not proved and the duty demand was unsustainable.

Issue (ii): Whether the extended period of limitation and penalty were invocable on the facts of the case.

Analysis: The statistics book had been regularly furnished to the Department, the relevant information was available in 2002, and the notice was issued later without any proof of suppression or intent to evade duty. In the absence of a sustainable allegation of suppression, the extended period could not be invoked. Since the demand itself failed, the penalty also could not survive.

Conclusion: The invocation of the extended period and the penalty were not sustainable.

Final Conclusion: The demand failed on merits as well as on limitation, and the impugned order was set aside.

Ratio Decidendi: A charge of clandestine removal and invocation of the extended limitation period cannot rest on uncorroborated discrepancies alone; the Revenue must establish, at least prima facie, actual clandestine clearance and the requisite suppression or intent to evade duty.

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